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Tesla shares set for ‘positive catalysts’ in coming weeks with Robotaxi day around the corner

Published 2024-06-21, 09:42 a/m
© Reuters Tesla shares set for ‘positive catalysts’ in coming weeks with Robotaxi day around the corner

Proactive Investors - Tesla Inc (NASDAQ:TSLA) is now positioned for “positive catalysts”, according to Wedbush, which looked ahead to the electric vehicle pioneer’s ‘Robotaxi’ day in August.

Describing Tesla as “a compelling risk/reward stock”, analyst Daniel Ives in a note said that a second-half rebound is “potentially in the cards” after “very choppy” first-half demand.

“We would expect once Tesla officially gets through the final steps in this Twilight Zone Delaware legal spider web that the board will have a new incentive-driven AI comp package for Musk that gets him to 25%-plus ownership while keeping all AI initiatives under the hood of Tesla,” Ives said.

“We believe the August 8th Robotaxi day will be a key historical moment for the Tesla story that we see as a near-term catalyst.”

The Wedbush team highlighted that Tesla first mentioned ‘Robotaxis’ back in 2019 and that nowadays it is “more of an AI and robotics play than a traditional car company.”

A full unveiling of the firm’s programs at the August event would make it a “key historic moment” for Tesla.

“Ultimately the key to reaching a $1 trillion-plus valuation is the autonomous and ‘full self-driving’ (FSD) vision taking hold for Tesla which appears to be turning a corner with this latest FSD v12.4 and now China FSD testing underway,” Ives said in a note.

“Our bull case of $350 is built around Musk and Tesla finding success on FSD and the autonomous future.”

Wedbush has an ‘Outperform’ rating for Tesla, and it has a current ‘base case’ price target of $275 per share – some 33% upside to Tesla’s current price of around $181.

Elon Musk securing the endorsement from his shareholders was an important step that will, in due course, enable Tesla to properly incentivize its mercurial chief executive, giving him a route to taking 25% of the company via performance-based options.

Stabilizing trading

Besides previewing the Robitaxi event and backing Musk’s pay deal, the broker told investors that it has seen signs of stabilization, in terms of pricing, in recent months.

It, meanwhile, appears the lion's share of the price cuts are now in the rearview mirror according to the broker, who also pointed to improving conditions in China.

“Demand in China is showing some signs of heating up as consumers in this key region recognize that no more major price cuts are coming," Ives said.

“EV competition from BYD, Nio, and others remain very fierce in China and ultimately for Tesla to see a global demand rebound this does not happen without China.

“The Street is not expecting any major fireworks for the June quarter but the seeds for a demand turnaround are starting to take place in our view and now it's about execution for Musk and Tesla heading into 2H and 2025.”

The analyst added: “The stock has been through a nightmare after a Cinderella ride the last few years and now it's time for Musk to turn this around.”

Read more on Proactive Investors CA


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